By Randy Giusto-
One of the biggest technology battles today is the battle over who will own the living room of the future. But listening to “The New Living Room” panel discussion at this past weekend’s Harvard Cyberposium 16, the first discussion underneath the debate was the implication that the living room may no longer be the center of family interaction and entertainment. With content providers now developing for multiple screens of all shapes, sizes, and interactivity, we won’t be changing just what we view but also quite frankly, where we view it.
In listening to Saul Berman of IBM Global Business Services, he described his household as one where his family goes to their own devices and not to the living room each evening to share an experience. He envisioned that more families would do this in the future. Will this accelerate the decline of “family time?”
While most of today’s market in the U.S. watches TV the old fashion way, it’s at the fringes where the user model is shifting, largely driven by the population on the coasts and younger generations, people under 40. At the fringes there are segments that are growing that challenge the hegemony of cable operators and service providers, as cutting the cord and over the top (OTT) services begin to get some traction. According to Berman, these segments will adopt the various technologies and content consumption solutions at different rates. Berman’s description of “family interaction” in his household between 7 and 11 pm may shock you, and point to the further destruction of family values as each family member slinks off to the glow of their own LCD, or it may be indicative to what you are already experiencing in your own house.
Still, the living room as a content consumption center is about to change, and so are the players who provide services into it. “The cable companies and satellite TV players have pretty much had a monopoly on TV content delivered into the home and are working hard to be first with interactive services and internet content authentication,” according to Keith Clinkscales, Senior VP of Content Development and Enterprises at ESPN. That may be true, but I see Apple and Google rapidly racing for that space, trying to disintermediate the service providers. Cord cutting, although still very nascent, will be another catalyst to push technology companies more into the forefront. There is one thing that does not bode well for cord cutting, and that’s sports. Clinkscales thinks it’s unlikely the NFL, NBA, Major League Baseball, and the NHL will unbundle and offer games ala carte any time soon. “NFL Sunday Ticket is a huge moneymaker for the NFL and an exclusive on DirectTV,” says Clinkscale.
TVs are getting more connected, as seen by the increase of models with Ethernet and Wi-Fi connections, the roll out of Google TV, and devices such as the Boxee Box and the Roku XD | S. Yahoo! two years ago launched an initiative with multiple TV brands to drive a series of icons and applets on screen that would be connected to internet services, and now many models are offering widgets for Pandora, Netflix, Facebook, and other sites. Social is being built into the TV fabric at a rapid rate, and so are other apps. Samsung is building an app store for its TV models, as are other TV brands. And while TV is still a very much lean-back experience, broadband is become a huge enabler to new services delivered through the TV or via other devices such as tablets, that will make their way into the living room to augment the experience. The days of getting only the content that the cable operator or satellite provider gave you are rapidly coming to a close.
As Olivier Manuel, Director of Content at Samsung pointed out at Cyberposium 16, “we are moving from 1,000 channels from the service provider, to millions from the web.” True, Pandora, Hulu Plus, Netflix, Roku, and others are all helping to push this envelope. But the same struggles will be there. Organizing it. Serving it up in an easy to use interface, with a recommendation engine that truly offers what we want to watch. The consumption of video as we know it is moving to a multi-room, multi-channel, multi-platform model. Apple and Google are the bigger brands pushing innovation, but smaller brands will also participate too. It’s still the cable companies’ and satellite providers’ battle to loose though in the long term.
Content providers are gearing up to drive their new backends that will serve up video content to multiple front ends- TV, tablets, phones, and in-car solutions. Each platform has its advantages and disadvantages too. Mobile is great for quick consumption, while TVs are great for that bigger theatrical effect, and for watching sports at length.
There are still many issues to be worked out. According to Mimi Thigpen, Senior Vice President of Strategy at Cox Communications, “this is all happening at a time when security, data management, privacy, and parental controls are becoming even more important as we move content between screens.” 3D is also arriving on the screen, and I think it will take some time to settle into the household. Just like we saw in theatrical releases, there is good 3D (Avatar) and there is bad 3D (Clash of the Titans). To ESPN’s Clinkscales, “it’s difficult to shoot in 3D. It makes for an interesting experience if you get it right, but not everyone loves it!” And I would add that not everything piece of content or every channel is relevant for 3D either.
So American households will be getting more and more choice, which may be good, or may be bad if it does nothing but confuse them as far as equipment and services offerings and bundles. IBM GBS’s Berman thinks, “it’s all about giving consumers choice but masking the complexity.” Obviously to IBM it’s all about the cloud. But who owns the cloud? According to Berman, “if Apple of Google control the experience, it becomes a monopoly.” Somehow I find this ironic because many have felt that the services providers have had a monopoly for years, based on what town you lived in. Your choice was either over the air or cable, until satellite arrived in the 1980’s. Now Telco’s have gotten into the game but the choices have not increased for all Americans as infrastructure buildouts have stalled.
So who will assert the most pressure in the battle for the living room and beyond? Will it be the content owners or the pipe owners? What happens when we start to see more mergers between service providers and content providers— ala Comcast and NBCU?
As content providers build their backend for a multi-screen world, will American families still assemble in a central place in the home to share entertainment experiences, or will we retreat to our bedrooms as we become lured away by content targeted at specific age groups and interests?
– Randy Giusto